Reform to the UK’s alcohol duty regime was the main announcement in this area in addition to a freezing of the duty rates on beer, cider, wine and spirits for another year.
Alcohol duty reform
The Government intends to restructure alcohol duty so that all beverages will be taxed in direct proportion to their alcohol content. The number of main rates will be reduced from 15 to 6, with common thresholds for each set of bands across product categories, and rates will be harmonised for drinks at 8.5 percent ABV or above.
Reduced rates will be introduced for products below 3.5 percent ABV in addition to the introduction of a common small producer relief to reduce the tax burden on smaller producers of wine, cider, spirits and made-wine below 8.5 percent ABV. Alongside this, a new relief that recognises the importance of pubs and supports responsible drinking will be introduced, with duty rates on draft beer and cider being cut by 5 percent.
The Government also published a consultation on the detail of these reforms, which will close on 30 January 2022. The application of these reforms to Northern Ireland will be discussed with the EU during the consultation period of the review.
Tobacco duties
Duty rates on all tobacco products increased by RPI + 2 percent. The rate on hand-rolling tobacco increased by RPI + 6 percent and the minimum excise tax increased by RPI + 3 percent this year. These changes all took effect from 6pm on 27 October 2021.
Gaming duties
The Government will legislate in Finance Bill 2021/22 to raise the Gross Gaming Yield bandings for gaming duty in line with RPI.
VAT exemption for dental prostheses imports
The current VAT exemption for dental prostheses supplied by registered dentists and other dental care professionals or dental technicians will be extended to imports of dental prostheses.
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